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Shell Oil (RDS.A) Gains As Market Dips: What You Should Know

Zacks Equity Research

Shell Oil (RDS.A) closed at $32.41 in the latest trading session, marking a +0.62% move from the prior day. This move outpaced the S&P 500's daily loss of 0.94%. Meanwhile, the Dow gained 0.04%, and the Nasdaq, a tech-heavy index, lost 2.13%.

Coming into today, shares of the oil and gas company had lost 2.95% in the past month. In that same time, the Oils-Energy sector lost 11.14%, while the S&P 500 gained 0.02%.

Investors will be hoping for strength from RDS.A as it approaches its next earnings release, which is expected to be July 30, 2020. The company is expected to report EPS of -$0.21, down 124.42% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.31 per share and revenue of $253.17 billion, which would represent changes of -92.33% and -28.1%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for RDS.A. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 5.62% higher. RDS.A currently has a Zacks Rank of #2 (Buy).

Digging into valuation, RDS.A currently has a Forward P/E ratio of 102.8. For comparison, its industry has an average Forward P/E of 29.37, which means RDS.A is trading at a premium to the group.

Also, we should mention that RDS.A has a PEG ratio of 20.56. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Oil and Gas - Integrated - International stocks are, on average, holding a PEG ratio of 14.64 based on yesterday's closing prices.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 65, putting it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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